The Issues of Modern Trading

Access to trading in today’s context is almost ridiculously easy. Google for a broker, open an account and voilà, you can now trade online like anyone. This might sound like good news, but more often than not, easy access makes trading a tricky matter when people think it’s something they can easily try out and possibly succeed after a few clicks. So let’s delve deeper into some of the modern problems of trading that have never been more rampant than before.

Investors’ experience level

The democratization of information online means investors now have access to data similar to investment professionals out there. It does seem like an edge that we are gaining, and it undeniably is. However, it is important to realise that there is almost always a clear disparity in terms of experience levels. Just because we have the information, does not necessarily translate to our ability to use the information relevantly and accurately. With more knowledge, investors tend to become overconfident, and that’s a fatal flaw!

Overconfidence is the key problem with online investors who trade excessively and that results in subpar returns. You would be surprised to find out that many novel traders end up becoming overconfident, and that they only learn their lesson in time, gaining more experiences along the way. This naturally implies suffering losses for a significant period before they learn to stop overtrading. With copy trading platforms like Omada available in recent decades, this problem is very much alleviated! Now, traders can imitate professionals, allowing average or inexperienced investors to achieve higher returns. So hooray to copy trading!

Overtrading

Another issue with trading today is the problem of overtrading. This is an absolutely destructive attribute, as excessive trading leads to reduced returns. And why do traders today have a tendency to overtrade? It all boils down to costs! Online trading reduces traditional costs associated with liquidity, transactions, and commissions. Investors tend to think that trading is now a good deal due to the low costs. This in turn leads to the problem of overtrading. Increased speculation among investors online actually ends up offsetting these cost reductions but we don’t realise it as we tend to compartmentalize our costs. But if you add them all up, you will come to find out that the cost reductions are insignificant after all.

Overtrading presents a dangerous problem for many new traders out there, so copy trading is a brilliant solution. First, it removes the problem of overtrading altogether. Second, the costs of transaction and gathering information are actually incurred by the signal provider, and not the follower! Isn’t that killing two birds with one stone? Omada is a great platform with low platform fees, so it is certainly cost-effective and free of any significant effort on your end, compared to trading all on your own.

It is probably clear by now how modern trading presents a number of problems we might not realise. It does allow us to be our own investment portfolio managers and this independence might seem cool for a while, but a practical way to manage your own investments is to do it with at least some professional guidance and Omada is the ideal guide for you! So, hop on with us and sign up and account here today!